Villamor vs. Court of Appeals

An action for reconveyance of real property based on fraud prescribes four years from discovery of the fraud, and discovery is deemed to have occurred when the means of knowledge were available to put an ordinarily prudent person upon inquiry that, if followed up, would have revealed the fraud — equivalent to actual discovery. Where the party entitled to assert the right had access to records referencing the fraudulent transaction and remained silent for over fourteen years, the right is barred by prescription and laches.

Spouses Victor Cortes and Maria Castañeda had eight children, six of whom died single and without issue. Barbara Cortes bore a son, Eustaquio Cortes, who married Sixta Ceniza and had five children — all of whom died unmarried and without forced heirs except Bartolome (a Catholic priest who died in 1937) and Nicanor (who became a Carthusian monk in Barcelona, Spain, and died in 1969 as the last of the Barbara Cortes line). Rufino Cortes, who died in 1909, allegedly left two legitimate children, Ireneo and Paula Cortes Villamor, who married and had children (the petitioners herein). The contested properties originally belonged to the Cortes siblings and were the subject of competing administration proceedings and a 1946 Project of Partition that apportioned parcels to both the Barbara Cortes line (through Sixta Ceniza) and the Rufino Cortes line (through Ireneo and Paula Villamor).

Spouses Victor Cortes and Maria Castañeda had eight children: Rufino, Barbara, Florencio, Casimira, Brigida, Braulia, Margarita, and Eugenia. Six of the eight died single and without issue. Barbara Cortes bore a son, Eustaquio Cortes, who married Sixta Ceniza and had five children — Dionisio, Bartolome, Nicanor, Agapita, and Amancia — all of whom remained unmarried and died without will or forced heirs. Dionisio, Amancia, and Agapita predeceased their father. Eustaquio died on October 20, 1932, survived by his spouse and two sons, Bartolome and Nicanor. Bartolome, a Catholic priest, died on November 14, 1937. Nicanor Cortes, also known as Father Gabriel Maria Cortes, died as a monk of the Carthusian Order in Barcelona, Spain, on August 28, 1969, as the last of the direct descendants of the Barbara Cortes line. Rufino Cortes, who died on June 12, 1909, allegedly left two legitimate children, Ireneo and Paula Cortes Villamor. Paula died single on January 29, 1967, without issue. Ireneo married Bersabela Perez and had five children — Candelario, Bartolome, Sofronio, Eleuterio, and Marcos, all surnamed Villamor — who are the petitioners herein. Ireneo died on April 21, 1966.

Shortly after Bartolome Cortes's death, Special Proceedings No. 227 was instituted for the settlement of his estate, with Fr. Diosdado Camomot, a close friend, named administrator. Between 1937 and 1938, Special Proceedings No. 262-C was filed for the intestate estates of Eugenia, Casimira, Florencio, Braulia, Margarita, and Barbara Cortes, with Atty. Primitivo Sato appointed administrator; this proceeding did not include Rufino Cortes. On September 27, 1938, Paula and Ireneo Cortes Villamor, claiming to be Rufino's legitimate children, filed a petition for administration of his estate under Special Proceedings No. 343-C, appointing Moises Mendoza as administrator. Mendoza submitted an inventory of properties allegedly belonging to Rufino Cortes's estate, which were the very same properties subject of Special Proceedings Nos. 227 and 262-C. A scramble over control and possession of the properties ensued between the heirs of Barbara Cortes, represented by Sixta Ceniza with Fr. Camomot's assistance, and the Rufino Cortes line represented by Ireneo and Paula Villamor.

On May 20, 1946, the parties filed a joint motion manifesting that the heirs had agreed to settle the matter amicably by partitioning the estate among themselves. After six months of negotiation, on December 7, 1946, a Project of Partition was executed by Sixta Ceniza and Fr. Camomot (as administrator of Bartolome Cortes's estate), assisted by their counsel Attys. Hipolito Alo and Fermin Yap, on one hand, and Ireneo and Paula Villamor, assisted by Atty. Gaudencio Juezan, on the other. The Project of Partition was thumbmarked by Sixta Ceniza at the house of a relative where she lived. Seven parcels of land were apportioned to Ireneo and Paula Villamor, and the remainder to Sixta Ceniza through Fr. Camomot. The Project was approved by Judge Edmundo S. Piccio on February 1, 1947, and by Judge S.C. Moscoso on April 14, 1948. On September 30, 1948, the administrators delivered the seven parcels to Ireneo and Paula Villamor. On November 25, 1953, Judge Florentino Saguin ordered both proceedings closed and terminated, with entry of judgment on March 18, 1954.

On November 23, 1960, Ireneo and Paula sold parcel 5 to Claudia Labos and Gregoria Suico. On September 23, 1966, Ireneo obtained free patent titles over parcels 1, 2, 4, 6, and 7; only parcel 3 remained unregistered. After Ireneo's death, his children executed an extrajudicial partition on July 28, 1969, dividing the remaining six parcels among themselves. Meanwhile, upon Sixta Ceniza's death on July 28, 1948, Special Proceedings No. 364-R was instituted for her estate. Fr. Nicanor Cortes, through counsel, successfully moved to revoke the appointment of Escolastico Ceniza as special administrator and to have Victorio Perez appointed instead. On October 21, 1954, Fr. Cortes executed a power of attorney before the Vice-Consul in Madrid, constituting Fr. Camomot as his attorney-in-fact for Special Proceedings No. 364-R. On August 18, 1955, Judge Clementino Diez declared Fr. Nicanor Cortes as the sole and universal heir of Sixta Ceniza. On May 16, 1962, Fr. Cortes executed a Deed of Conveyance transferring ten parcels of land, including those received by his mother under the Project of Partition, to several persons.

After Fr. Nicanor Cortes died on August 28, 1969, Special Proceedings No. 3062-R was instituted for his estate, with respondent Daniela Ceniza Urot appointed administratrix. On June 4, 1970, respondent filed Civil Case No. R-11726 against petitioners for recovery of the seven parcels received by Ireneo and Paula Villamor in the Project of Partition, accounting, and receivership, alleging that Ireneo and Paula had fraudulently misrepresented themselves as Rufino Cortes's legitimate children and that the properties belonged to other Cortes family members, not Rufino. Petitioners moved to dismiss on grounds of prior judgment and prescription, which was denied on July 27, 1970. After trial, the Court of First Instance rendered judgment against petitioners on January 21, 1972, finding that extrinsic fraud had been committed and that Fr. Nicanor Cortes had no knowledge of the proceedings. The Court of Appeals affirmed.

• Fr. Cortes's Knowledge: Petitioners maintained that the Court of Appeals and the trial court totally ignored letters of Fr. Nicanor Cortes disclaiming ownership and acknowledging that petitioners and their predecessors-in-interest were the owners and possessors of the lands, which would have established that Fr. Cortes had personal knowledge of Special Proceedings Nos. 262-C and 343-C and that no fraud was committed against him.
• Validity of Sixta Ceniza's Consent: Petitioners argued that the helplessness of Sixta Ceniza could not have vitiated the Project of Partition, because although she was blind and could not walk unassisted, her mental faculty was very clear, as testified by her granddaughter Roure Ceniza-Sanchez.
• Nature of Fraud: Petitioners insisted that all the fraud alleged by private respondent was intrinsic fraud within the line of deliberation of the probate court, not extrinsic or collateral fraud, and therefore the cause of action had long prescribed.
• Prescription and Adverse Possession: Petitioners contended that from September 1948 or some twenty-two years, their predecessors-in-interest had been in peaceful, notorious, public, actual, and continuous possession adversely against the whole world in concepto de dueño until disturbed in June 1970.
• Jurisdiction and Prior Judgment: Petitioners alleged as special defenses that Special Proceedings No. 343-C was a proceeding in rem with all jurisdictional requirements complied with, that the question of legitimacy of Ireneo and Paula Villamor had been duly raised and resolved in said proceedings, and that the cause of action was barred by prior judgment and the statute of limitations.

• Factual Nature of Issues: Respondent contended that the issues raised in the petition largely dwell on challenging the findings of fact of the trial court and the Court of Appeals, which cannot be done in a petition for review on certiorari.
• Extrinsic Fraud and Concealment: Respondent alleged that Ireneo and Paula Villamor fraudulently represented themselves as legitimate children of Rufino Cortes, who remained unmarried all his life, and falsely enumerated properties as belonging to Rufino when he neither had property during his lifetime nor inherited any from his sisters, whom he predeceased.
• Lack of Notice: Respondent asserted that the fraudulent proceedings and Project of Partition were conducted without notice to Fr. Nicanor Cortes or his legal representative, and that the fraud was discovered for the first time only in March 1970 by Atty. Ramon Ceniza, placing the action filed on June 4, 1970 well within the four-year prescriptive period.

• Review of Factual Findings: Whether the Supreme Court may review the factual findings of the Court of Appeals in a petition for review on certiorari.
• Knowledge of Fr. Nicanor Cortes: Whether Fr. Nicanor Cortes had personal knowledge of Special Proceedings Nos. 262-C and 343-C and the Project of Partition.
• Validity of Sixta Ceniza's Consent: Whether the physical helplessness of Sixta Ceniza vitiated her consent to the Project of Partition.
• Nature of Fraud: Whether the fraud allegedly committed by Ireneo and Paula Villamor was extrinsic or intrinsic.
• Prescription: Whether the action for reconveyance had prescribed.

• Review of Factual Findings: Yes. The case falls within recognized exceptions to the general rule that only questions of law may be reviewed, because the lower courts' conclusions were grounded on misapprehension of facts and were contradicted by evidence on record.
• Knowledge of Fr. Nicanor Cortes: Yes. The evidence on record — including Fr. Camomot's testimony, Fr. Cortes's own letters, and his intervention in Special Proceedings No. 364-R — abundantly established that Fr. Nicanor Cortes had personal knowledge of the proceedings and the partition.
• Validity of Sixta Ceniza's Consent: No, her consent was not vitiated. Blindness or poor memory does not equate to unsound mind; where mental faculty is clear, physical infirmity alone does not invalidate consent.
• Nature of Fraud: Assuming arguendo that extrinsic fraud was committed, the action nonetheless prescribed.
• Prescription: Yes. The prescriptive period commenced at the latest on August 18, 1955, when Fr. Cortes was declared sole heir of Sixta Ceniza in proceedings whose inventory expressly referenced the Project of Partition; the four-year period expired well before the complaint was filed on June 4, 1970.

• Review of Factual Findings: While the general rule is that the Supreme Court's jurisdiction in cases from the Court of Appeals is limited to questions of law and that the CA's factual findings are conclusive, recognized exceptions exist: when the conclusion is grounded on speculation or conjecture, when the inference is manifestly mistaken, when there is grave abuse of discretion, when the judgment is based on misapprehension of facts, when the CA went beyond the issues, when the CA's findings are contrary to those of the trial court, when findings are conclusions without citation of specific evidence, when the facts in the petition are undisputed, and when the finding is premised on absence of evidence and contradicted by the record. The Court found that the lower courts forced their conclusions against the evidence adduced, justifying review.

• Knowledge of Fr. Nicanor Cortes: Fr. Diosdado Camomot testified categorically that he informed Fr. Nicanor Cortes about Special Proceedings No. 343 and sent him a copy of the Project of Partition. His testimony was detailed, straightforward, and corroborated by Roure Ceniza-Sanchez, a witness for the respondent, who testified that Fr. Camomot informed Fr. Cortes about the properties. Fr. Cortes's letter of August 20, 1948 to Dra. Felicisima Cortes-Veloso referred to "a new court trouble is brewing before the old one is completely settled," which could only refer to Special Proceedings Nos. 262, 343, and 227, as those were the only proceedings then in progress. Additional letters from Fr. Cortes dated April 6, 1967, May 11, 1967, November 29, 1962, and December 1, 1967, addressed to various persons, demonstrated that he knew the persons in possession of the lands and directed inquiries to them, recognizing their ownership. His Deed of Conveyance of May 9, 1962 declared that he acquired lands by succession from Eustaquio, Casimira, Eugenia, Bartolome, and Sixta Ceniza, as shown in the order of the CFI in Special Proceedings No. 364-R. Furthermore, Fr. Cortes actively intervened in Special Proceedings No. 364-R, where the inventory expressly identified properties by their corresponding parcel numbers in the Project of Partition, charging him with knowledge of the partition's existence.

• Validity of Sixta Ceniza's Consent: The Court found tenable the contention that Sixta Ceniza's helplessness affected only her physical condition. Her granddaughter testified that her mental faculty was "very clear." The Court applied the doctrine that where the mind is sound, neither old age, illness, nor the need for physical assistance in signing invalidates consent. The fact that Sixta Ceniza was able to validly donate lands through documents signed in October 1947 before Notary Fermin Yap — as Fr. Nicanor Cortes himself communicated — further belied the claim of helplessness.

• Nature of Fraud: The lower courts held that the fraud was extrinsic because there was no hearing for declaration of heirs and no opportunity given to Fr. Cortes to intervene. However, the Court noted that Special Proceedings No. 343-C was a proceeding in rem, and publication of the petition in a newspaper of general circulation was sufficient to give notice to the whole world, including Fr. Cortes, who was not a presumptive heir of Rufino Cortes and therefore was not entitled to personal notice in that proceeding. Any failure to give notice in Special Proceedings No. 262-C, where Fr. Cortes was a presumptive heir, must be attributed to whoever instituted that proceeding, not to Ireneo and Paula Villamor. The pre-war records of Special Proceedings No. 262-C were lost or destroyed during World War II, rendering it impossible to determine whether Fr. Cortes was notified, but the probability of notification could not be discounted.

• Prescription: An action for reconveyance based on fraud must be filed within four years from discovery of the fraud. Under equitable principles, the means of knowledge are equivalent to actual knowledge: knowledge of facts that would put an ordinarily prudent person upon inquiry, which if followed up would reveal the fraud, is equivalent to actual discovery. Discovery must be deemed to have occurred at the latest on August 18, 1955, when Judge Diez declared Fr. Cortes the sole heir of Sixta Ceniza in Special Proceedings No. 364-R and granted letters of administration to Fr. Camomot, Fr. Cortes's attorney-in-fact. The inventory in that proceeding specifically referenced Special Proceedings Nos. 262 and 343 and the Project of Partition. From that date, the law imputed to Fr. Cortes knowledge of the proceedings and such facts as would have led him, by due diligence, to discover the fraud. From August 18, 1955 until his death on August 28, 1969, Fr. Cortes remained silent and even conveyed lands received by his mother under the partition. The four-year prescriptive period therefore expired in 1959, well before the complaint was filed in 1970. The respondent's right could not rise higher than its source, and the negligence or omission to assert a right within a reasonable time, combined with the lapse of time and prejudice to the adverse party, operated as a bar in equity.

• Exceptions to the Conclusiveness of CA Factual Findings — While the Supreme Court's jurisdiction in cases from the Court of Appeals is generally limited to questions of law, with the CA's factual findings being conclusive, nine recognized exceptions allow review: (1) when the conclusion is grounded on speculation, surmise, or conjecture; (2) when the inference is manifestly mistaken; (3) when there is grave abuse of discretion; (4) when the judgment is based on misapprehension of facts; (5) when the CA went beyond the issues and its findings are contrary to the admissions of both parties; (6) when the CA's findings are contrary to those of the trial court; (7) when findings are conclusions without citation of specific evidence; (8) when the facts in the petition are undisputed by the respondents; and (9) when the finding is premised on absence of evidence and is contradicted by the record. The Court applied exceptions (4) and (9), finding that the lower courts based their conclusions on misapprehension of facts and that their findings were contradicted by abundant evidence on record.

• Prescription of Action for Reconveyance Based on Fraud — An action for reconveyance of real property resulting from fraud prescribes in four years from the discovery of the fraud. Discovery is not limited to actual knowledge; under equitable principles, the means of knowledge are equivalent to actual knowledge. Knowledge of facts that would put an ordinarily prudent person upon inquiry, which if followed up would result in discovery of the fraud, constitutes constructive discovery and triggers the prescriptive period. The Court applied this by holding that the prescriptive period commenced at the latest on August 18, 1955, when Fr. Cortes was declared sole heir of his mother in proceedings whose inventory expressly referenced the partition.

• Laches — Negligence or omission to assert a right within a reasonable time warrants a presumption that the party entitled to assert it either abandoned or declined to assert it, and casts doubt on the validity of the claim of ownership. Such neglect, taken in conjunction with the lapse of time and other circumstances causing prejudice to the adverse party, operates as a bar in a court of equity. The Court applied this doctrine to Fr. Cortes's silence from 1955 to his death in 1969, during which he never asserted any right despite having knowledge of the partition.

• Sound Mind Despite Physical Infirmity — Where the mind of a person is in perfectly sound condition, neither old age, nor illness, nor the fact that somebody had to guide the person's hand in order to sign, is sufficient to invalidate consent or a will. The Court applied this to uphold the validity of Sixta Ceniza's thumbmark on the Project of Partition despite her blindness and inability to walk unassisted.

• Nature of Partition — Partition is the division between two or more persons of real or personal property which they own as co-partners, joint tenants, or tenants in common, effected by setting apart individual interests so that each may enjoy and possess in severalty. A partition presupposes co-ownership; it is immaterial in whose name the properties were declared for taxation purposes, as the parties to the partition are presumed to admit the fact of co-ownership and to seek a separation of interests.

• "In actions in equity, the rule is that the means of knowledge are equivalent to actual knowledge; that is, that a knowledge of facts which would have put an ordinarily prudent man upon inquiry which, if followed up, would have resulted in a discovery of the fraud, was equivalent to actual discovery." — This passage articulates the controlling doctrine on constructive discovery of fraud, which the Court used to fix the commencement of the prescriptive period at August 18, 1955, when Fr. Cortes was declared sole heir of his mother in proceedings referencing the partition.

• "Her predecessor-in-interest, Fr. Nicanor Cortes, not having filed any action for reconveyance within the prescriptive period provided by law, neither could private respondent do so now, for her right cannot rise higher than its source." — This statement establishes the principle that an administratrix's right to sue for reconveyance is derivative and cannot exceed the rights of the decedent, barring the action because Fr. Cortes himself had allowed the prescriptive period to lapse.

• "Just because a person is blind or of poor memory, it does not follow that she is of unsound [mind]." — This passage defines the doctrine that physical infirmity alone, absent mental incapacity, does not vitiate consent, applied to uphold the validity of Sixta Ceniza's thumbmark on the Project of Partition.

• "Such neglect to assert a right taken in conjunction with the lapse of time, more or less great, and other circumstances causing prejudice to the adverse party, operates as a bar in a court of equity." — This formulation of the laches doctrine was applied to bar the respondent's claim due to Fr. Cortes's prolonged silence and failure to act despite knowledge of the partition.

• Tolentino vs. De Jesus, 56 SCRA 167 — Cited as the source of the nine recognized exceptions to the general rule that the Supreme Court may not review the Court of Appeals' factual findings in a petition for review on certiorari. The Court applied exceptions for misapprehension of facts and findings contradicted by evidence on record.
• Neyra vs. Neyra, 76 Phil. 297 (citing Amata vs. Tablizo, 48 Phil. 485) — Cited for the doctrine that where the mind is sound, neither old age, illness, nor the need for physical assistance in signing invalidates a will or consent. Applied to uphold the validity of Sixta Ceniza's thumbmark.
• Balbin vs. Medalla, 108 SCRA 666 and Medina vs. Court of Appeals, 109 SCRA 437 — Cited for the rule that an action for reconveyance of real property resulting from fraud prescribes in four years from discovery of the fraud.
• Smith vs. Edwards, 17 P [2d] 264, 270 — Cited for the equitable principle that the means of knowledge are equivalent to actual knowledge, establishing constructive discovery as the trigger for the prescriptive period.
• Guerrero vs. CA, 126 SCRA 109 (citing Heirs of Pedro Guminpin vs. CA, 120 SCRA 687 and Masagandanga vs. Argamora, 109 SCRA 53) — Cited for the doctrine of laches: neglect to assert a right within a reasonable time, combined with lapse of time and prejudice to the adverse party, operates as a bar in equity.
• Confesor vs. Pelayo, 111 Phil. 416 — Cited for the definition and purpose of partition: to put an end to common tenancy and vest in each co-owner a sole estate in specific property.

• Section 642, Code of Civil Procedure — Enumerates the persons who can act as executors and administrators, providing that where persons with preferential right are not competent or unwilling to serve, administration may be granted to such other person as the court may appoint. The Court cited this to reject the lower courts' finding that the appointment of "strangers" as administrators was an indicium of fraud.

Feliciano and Cortes, JJ., concurred. Fernan, J., took no part. Gutierrez, Jr., J., was on leave.